Hello I am the Cafe Trader.
There have been some wild days, and it's not over. Amidst all the stormy seas, and the major successes, I wanted to bring to your attention a stock that I think is becoming of great value.
UPS has been getting beat down for over three years, why?
Beatdown
- Trump Tariffs contributing to China slowdown. (35% of deliveries comes from China).
- Guidance downgraded due to uncertainties with the macroglobal scale, "spooking investors".
- UPS cutback dealings with amazon to increase profitablity (but also reducing volume and revenue.)
Just to name a few...
If such bad news, why buy?
Fundamentally their business model is strong, and the dividend is PAYING.
Dividends and Warren Buffett.
Buffett is still known to use a model by his mentor, Benjamin Graham. (if you don't know, take a little youtube shallow dive).
This has been used to build a large portion of how buffet evaluates a stock. Using his formula, the Maximum intrinsic value of UPS is $69.87
As of writing this article, UPS sits roughly 21% higher than that number. If we get close, even the fundamentalists may have a hard time passing this up.
Dividends
At 1.68 Dividend a quarter, that put's UPS at almost 7.91% yield!
So my thought process is; even if you lose 8% from Graham's buy price, you make up on the dividend in a year. (although I would be surprised if it touched that golden zone).
TLDR LONG TERM
Aggressive buy: $88 (we are below that right now)
Great Price: $75.50 - 80.50
Graham's STEAL: $71 or Below.
NOTE: Graham took other things about a stock into consideration as we, as you should as an investor. This article is meant to assist your own DD.
-Since this is charted on a weekly chart I have charted a probable 4-6 month swing. (almost 50% gain).
-It really does depend on where this bounces, we have already broke through some major levels.
-I have a feeling UPS drivers might be cashing out their 401k and panic selling.
That's all for UPS!
I hope you enjoyed the article, thank you for your time.
If you enjoyed please consider a follow and a boost!
thecafetrader
There have been some wild days, and it's not over. Amidst all the stormy seas, and the major successes, I wanted to bring to your attention a stock that I think is becoming of great value.
UPS has been getting beat down for over three years, why?
Beatdown
- Trump Tariffs contributing to China slowdown. (35% of deliveries comes from China).
- Guidance downgraded due to uncertainties with the macroglobal scale, "spooking investors".
- UPS cutback dealings with amazon to increase profitablity (but also reducing volume and revenue.)
Just to name a few...
If such bad news, why buy?
Fundamentally their business model is strong, and the dividend is PAYING.
Dividends and Warren Buffett.
Buffett is still known to use a model by his mentor, Benjamin Graham. (if you don't know, take a little youtube shallow dive).
This has been used to build a large portion of how buffet evaluates a stock. Using his formula, the Maximum intrinsic value of UPS is $69.87
As of writing this article, UPS sits roughly 21% higher than that number. If we get close, even the fundamentalists may have a hard time passing this up.
Dividends
At 1.68 Dividend a quarter, that put's UPS at almost 7.91% yield!
So my thought process is; even if you lose 8% from Graham's buy price, you make up on the dividend in a year. (although I would be surprised if it touched that golden zone).
TLDR LONG TERM
Aggressive buy: $88 (we are below that right now)
Great Price: $75.50 - 80.50
Graham's STEAL: $71 or Below.
NOTE: Graham took other things about a stock into consideration as we, as you should as an investor. This article is meant to assist your own DD.
-Since this is charted on a weekly chart I have charted a probable 4-6 month swing. (almost 50% gain).
-It really does depend on where this bounces, we have already broke through some major levels.
-I have a feeling UPS drivers might be cashing out their 401k and panic selling.
That's all for UPS!
I hope you enjoyed the article, thank you for your time.
If you enjoyed please consider a follow and a boost!
thecafetrader
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.